A new bill has been proposed in Nigeria that would mandate individuals involved in banking, insurance, stockbroking, or other financial services to provide a Tax Identification Number (TIN) as a prerequisite for opening or maintaining accounts.
The bill, titled “A Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States, and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters,” aims to boost tax compliance and streamline the country’s revenue collection process. According to the document, dated October 4, 2024, and obtained from the National Assembly, individuals engaged in these financial activities must provide a tax ID before they can open a new account or operate an existing one.
This initiative is part of a broader strategy to ensure that all individuals and entities participating in Nigeria's financial sector are properly registered for tax purposes. The bill further stipulates that non-residents supplying taxable goods or services in Nigeria or earning income from the country must also register for tax purposes and obtain a TIN.
However, non-residents who earn passive income from investments in Nigeria will not be required to register, though they must still provide relevant information as directed by the tax authority. The proposed legislation also gives tax authorities the power to automatically register individuals who are required to obtain a TIN but fail to do so. In such cases, the tax authority is expected to promptly inform the individual of their registration and issue the tax ID accordingly.
Failure to comply with these requirements may result in administrative penalties. According to the bill, a taxable person who fails to register for tax will incur a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.
